Trade and economic relations

Ukraine's membership of the WTO in 2008 and the entry into force of the Deep and Comprehensive Free Trade Area (DCFTA is an integral part of the Association Agreement) could further deepen already promising economic partnership.

 

Information Note to EU business operating and/or investing in Crimea/Sevastopol pdf - 69 KB [69 KB]

 

External trade is vitally important for both the Ukrainian and EU economies. Trade is an engine for growth and jobs and has a direct impact on the day-to-day lives of people and businesses. Increased trade and competition can lower prices, provide better quality and greater choice for consumers and create more and better jobs for both trading partners.

The EU is one of the most open economies in the world, with very low average applied tariffs, and is committed to trade liberalisation for the benefits of all. International trade provides employment for around 18% of the labour force and generates a 7% wage premium for EU workers. The EU was a strong supporter of Ukraine's accession to the World Trade Organisation (WTO), which Ukraine joined in 2008, as it believed, and still does, that closer economic integration and increased trade with Ukraine can promote economic growth in Ukraine.

Building on that membership, the EU and Ukraine launched negotiations on a Deep and Comprehensive Free Trade Area (DCFTA), as part of the wider Association Agreement.These negotiations were completed on 19 October 2011 and the text of the Agreement was initialled in 2012.

On 27 June 2014, the EU-Ukraine Association Agreement was signed by European Union Heads of State and Government and Ukrainian President Petro Poroshenko in Brussels. It is partially provisionally applied as of 1 November 2014; while Title IV of the Association Agreement (which establishes a Deep and Comprehensive Free Trade Area (DCFTA)) is provisionally applied since 1 January 2016.

The reason for provisional application (rather than complete application) is that the Agreement has to be ratified by all 28 EU Member States, which may still take some time as each Member State has to comply with different internal procedures. The state of play of ratification by each Member State can be found here.

It is worth mentioning that until the DCFTA was provisionally applied and in order to maintain its support for Ukrainian exporters, the EU extended to Ukraine autonomous trade measures (which were in force since 23 April 2014). In practice it meant that the EU had already begun to reduce or eliminate its customs duties on goods originating in Ukraine, allowing Ukrainian exporters better access to the EU market.